The FOMC issued the minutes
from its last meeting, where the Fed left rates unchanged and lowered
its forecast for hikes this year from four to two. Policymakers debated
whether to raise rates but a consensus emerged that risks from a global
economic slowdown warranted a cautious approach. According to the
minutes, many Fed members said they were concerned that interest rates
were still so low that the central bank had limited firepower to respond
to shocks from abroad.

The proposed $160 billion merger
between US-based Pfizer and Ireland-based Allergan is dead. Changes in
U.S. tax codes dealt a blow to the largest-ever heath sector deal. New
regulations issued Monday by the Treasury Department targeted so-called
inversions, under which a U.S. company moves its base to a country with a
more favorable taxation environment. Pfizer is expected to pay Allergan
a $150 million breakup fee.

With the deal behind it, Pfizer said it
would decide this year about whether to split off its hundreds of
generic medicines into a separate business. Allergan said it would move
ahead with plans for its $40.5 billion sale of its generic drug business
to Israel’s Teva Pharmaceutical Industries. It expects the transaction
to close by June.

The chairman of the U.S. House Transportation
and Infrastructure Committee has come out against Canadian Pacific’s
proposed railroad merger with Norfolk Southern, dealing another blow to
the likelihood of a deal. Bill Shuster noted that CP Rail had actively
pursued some sort of merger in the U.S. since 2014, which he said “has
done nothing but create uncertainty in the rail industry.”

The Justice Department
has filed a lawsuit aimed at stopping Halliburton from merging with
Baker Hughes, a deal that would combine the No. 2 and No. 3 oil services
companies. The DOJ says the deal threatens to eliminate head-to-head
competition in 23 products and services used in oil exploration and
create a duopoly with market leader Schlumberger. A merger might still
happen if they divest assets or make other accommodations, but more than
likely, this kills the deal.

Oil prices are rallying on
hopes that both OPEC and non-OPEC members will agree to an output
freeze at upcoming talks in Doha on April 17. Fresh comments from Kuwait
and Russia suggest that global producers could reach a supply agreement
deal despite conflicting statements by participants Saudi Arabia and
Iran. Crude is also getting a boost from API industry data that showed
U.S. crude inventories falling by 4.3 million barrels last week.

Clean energy
investment broke new records in 2015 and is now seeing twice as much
global funding as fossil fuels. One reason is that renewable energy is
becoming ever cheaper to produce. Government subsidies have helped wind
and solar get a foothold in global power markets, but economies of scale
are the true driver of falling prices.

Just since 2000, the amount of
global electricity produced by solar power has doubled seven times over.
Even wind power, which was already established, doubled four times over
the same period. For the first time, the two forms of renewable energy
are beginning to compete head-to-head on price and annual investment.
The reason for the strong growth in clean energy is that it’s a
technology, not a fuel. As such, efficiency increases and prices fall as
time goes on. What’s more, the price of batteries to store solar power
when the sun isn’t shining is falling in a similarly stunning arc.

Global bond yields
fell to a record, a warning sign for the worldwide economy. The yield
on the Bank of America Global Broad Market Index dropped to 1.3%, the
lowest in almost 20 years of data. A third of the world’s
developed-market sovereign debt now has negative yields, after Europe
and Japan cut interest rates below zero to counter deflation.

Investors
rushed to higher-yielding debt, fueling the global rally. Japan’s
economy contracted in the last quarter of 2015, while the Eurozone’s
barely grew. China this month cut its growth target. Bond yields
indicate investors expect inflation worldwide to be about 1.1 percent.
The figure dropped to 0.89 percent in February, the lowest level in more
than five years.

The “Panama Papers” have
claimed their first casualty: Iceland’s Prime Minister, Sigmundur
Gunnlaugsson said he stepped down from his post, insisting it was a
resignation, after the leak revealed his wife’s ownership of a shell
company set up in the British Virgin Islands.

Today, comes word that at
least three of the seven people on the Chinese Communist Party’s most
powerful committee, including President Xi Jinping, have relatives who
have controlled secretive offshore companies. It is uncertain what will
happen in China, where most people aren’t even aware of the leaked
documents. Chinese government officials have blocked internet searches
and online discussion that involve the words “Panama Papers”.

Apparently
information about the leaked documents and the players involved will be
dished out on a near daily basis. Names of US citizens are expected in
about one month. It will take some time to devour 11.5 million documents
and connect the dots between 14,000 clients of Mossack Fonseca and the
214,000 offshore entities they created.

Here is what we do know; the system is rigged, and unless you are
part of the one percent, it is rigged against you. Legislatures don’t
write laws for you, courts don’t secure justice for you. The taxes you
pay are not paid by people who are much wealthier than you; they cheat
the system and they get away with it.

It is hard to muster righteous
indignation because rational thought and recent history tells us it is
nothing more than an exercise in futility. We might reasonably expect a
few indictments of minor players, sacrificial lambs for the slaughter.
We know the system is rigged and the elites are cheating the rest of
us; the only surprise would be if they weren’t cheating us. The big
question that’s circling around the Panama Papers scandal at the moment
is why more Americans haven’t been implicated.

Rumors are swirling in
the comments section that wealthy Americans have bribed their way out of
mention in the documents. It might just be that Mossack Fonseca’s
client base is largely Europeans, Asians, and Latin Americans, because
US citizens can just set up an anonymous shell company in Nevada, or
Delaware, or South Dakota; no need to deal with a Panamanian law firm.
As the details from the Panama Papers are dribbled out for consumption,
we will see more Americans named.

Puerto Rico’s financial crisis is escalating.
The island has taken steps toward a unilateral moratorium on all
government debt payments, a sudden move that surprised both Washington
and Wall Street. The Puerto Rican legislature passed an emergency
declaration authorizing the governor to suspend payments on $72 billion
in public debt—setting up a dramatic showdown between Puerto Rico and
hedge funds amid the island’s historic debt crisis.

The bill authorizes
the Puerto Rican governor to “protect the health, security and public
welfare … by using government funds first and foremost for public
services.” The emergency measure was in response to a suit filed by
hedge funds attempting to freeze the assets of Puerto Rico’s Government
Development Bank in efforts to stop the bank from spending money on the
island that the hedge funds want to go toward upcoming debt payments.

San Francisco has become the
first U.S. city to mandate six weeks of fully paid parental leave (in
companies with 20 or more workers), requiring employers to shoulder much
of the cost and exceeding federal and state rules for private-sector
employees. California’s governor Jerry Brown on Monday signed into law a
bill raising the state’s minimum wage from $10 to $15 an hour by the
year 2023.

A big change for investors
today, as the Labor Department unveiled the final version of its
long-awaited fiduciary rule, requiring financial professionals to put
their customers’ interests ahead of their own. The language is tougher
than an existing rule that only requires brokers to ensure products are
“suitable.” The Labor Department made some concessions to the financial
industry in the final version of its highly-anticipated fiduciary rule.

In one of the biggest changes from the initial proposal, the final rule
simplifies the “best interest contract,” a provision that allows
brokers to continue to get paid commissions so long as they make a
variety of disclosures to customers. Unlike the draft proposal, the
final rule does not restrict brokers from pushing proprietary products,
splitting revenue with creators of funds they promote, or recommending
risky, high-fee investments in alternative assets and certain annuities.

Additionally, the final rule includes a “grandfather” provision that
won’t require brokers to adhere to a fiduciary standard for their
previous recommendations to customers. The rule also loosens previously
proposed disclosure requirements for fees. While the initial rule
required annual disclosure of fees, the final rule removes that
requirement. The final rule also eliminates a requirement to provide
clients with one-, five- and ten-year projections of fees at the point
of sale.

BP will be able to deduct a
big chunk of its $20 billion Gulf of Mexico oil spill settlement for
tax purposes. Under U.S. law, companies are not allowed to deduct
penalties they pay as part of a settlement, but only $5.5 billion of the
$20 billion cost of the settlement is a fine. BP can classify the
remainder as “ordinary business expenses,” which are deductible.

Forget Apple vs. the FBI,
WhatsApp just switched on encryption for over a billion people. Every
conversation on the messaging service, whether it be a private or group
chat, will now have full end-to-end encryption, thus making the
recipient the only person who can see the message. WhatsApp was bought
by Facebook for $19 billion in 2014.

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